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News/Business. Becky Quick, Joe Kernen, Andrew Ross Sorkin. Business news and talk as the trading day unfolds on Wall Street. New. (CC)

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Us 31, Turkey 25, Hp 13, U.s. 11, Garth 10, Greece 8, Joe 8, Nespresso 7, Ho 7, Becky 7, Washington 7, Europe 6, Dick Kovacevich 5, Simpson Bowles 5, Cnbc 5, Sandy 5, Elmo 4, Citi 4, United States 4, Steve 4,
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  CNBC    Squawk Box    News/Business. Becky Quick, Joe Kernen, Andrew Ross Sorkin.  
   Business news and talk as the trading day unfolds on Wall...  

    November 21, 2012
    6:00 - 9:00am EST  

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i'm becky quick along with joe kernen and andrew ross sorkin. it is day before thanksgiving. it means we are giving thanks. it also means millions of americans are getting ready to travel trains, planes and automobiles. about 3.1 million holiday travelers planning to fly to their holiday destinations. aaa is projecting that more than 43 million americans will take to the roads and airways during this holiday. >> that's up a little less than 1% over last year, but it is the fourth consecutive year of increase since we saw a steep decline in 2008. >> the markets here are open for a full day of trading today. they're closed tomorrow and friday will be a shortened session. we have both the stock and the bond markets closing at 1:00 p.m. eastern on friday. take a look at the u.s. equity futures. the dow is down by about 3 points. the s&p 500 is off by four.
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the nasdaq down by about 12. because of tomorrow's holiday, you do have the labor department coming out, releasing its weekly jobless claims numbers today. we get them a day early instead of a day late. also today we'll be getting weekly mortgage rates. and freddie mac will report on the weekly mortgage rate averages as well. >> let's talk about the top global market story this morning. it is greece's international lenders, which did not reach a deal, and now they won't be releasing that next bailout payment. nearly 12 hours of talks failed to reach a consensus. the imf and the central bank all going to gather again on monday to try again, but this is not necessarily good news at all. hostess brands will proceed with a plan to go out of business. the maker of twinkies says last-minute talks with the striking workers broke down yesterday, hearing with a bankruptcy judge set for 11:00 eastern time. then we have another string of
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bad news. >> a bad development. >> a very bad development. >> i thought for sure they were going to find some sort of deal. >> i opened all the box of stuff we were hoarding. i was assuming there would be a deal. >> there was no chance of a deal. >> i thought there was. >> they were losing $10 million, $15 million a year. >> they're not going to go away. we were just talking about how nice it is that we are nostalgic. i haven't bought a pack of twinkies in 20 years, but i don't want them to go away. i want my kids to know about them. >> with kyle growing up, he's not going to know. >> people around the country heard hostess is going away, and they're like what? >> did you notice it was front page of every newspaper? it wasn't just like one story. there were multiple stories in every newspaper. >> yeah. as far as autonomy goes -- i like what the guy is saying.
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hewlett-packard is using it as a crappy acquisition. >> there's something strange about this story. >> i'm still convinced there's something off about this story. >> with the hp side of it. >> it's not to suggest there wasn't fraud or something else, but the other thing that they didn't call it fraud or try to imply even more heavily. >> they even call it malfeasance. that's from potter. >> you going to watch potter? >> i will. if you'd like me to. you watch "it's a wonderful life"? every man should watch it. >> you watch it every year? >> no, but i do like it. i cry. it's the only movie i really cry for. the fbi and s.e.c. -- when his ears hurt and doesn't know that it was poison that he sent to the kid. i did it for you! the s.e.c. said to be probing these allegations about hewlett-packard's allegation of
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autonomy. hp said it was a victim of a multi-billion-dollar fraud. mean tile, the founder of autonomy and former ceo mike lynch is telling cnbc that he was shocked by the allegations and he blamed hp for mismanagement. >> we're talking about a massive elephant in the room that wasn't spotted and the reason it wasn't spotted s very simple, it wasn't there. it was done in their own words meticulously and great detaille then they actually ran the company, including doing all of the books for the last four quarters. >> shares of hp were not as bad as they were at certain points yesterday, but that's this morning's trading, so it doesn't really show you where it was yesterday. i think it closed above 13. and it hurt the dow, even though the dow managed to just close down in single digits. >> you don't think there's something wrong with this story, though? >> also, by the way, if you're
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mike lynch -- if you actually thought there was even a chance that you were going to jail over this or that there was a real issue -- >> you would have shut your mouth. >> you're on lockdown. >> i don't know which side is weirder on this. i can't imagine hp bringing this without having some serious -- >> oh, absolutely. >> serious evidence that points to this direction. it's very strange that they never contacted the ceo, the former ceo of autonomy when they did this. he actually talked to all things digital, too. and he told these guys that hp jacked up the price on autonomy software by 30%, which drove away customers. but notably not paid commissions to sell autonomy software, which is interesting. >> shc capital is another story. it says it will continue to cooperate with the government. yesterday prosecutors charged a former employee of the firm with insider trading. but steve coen is said to have
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personally signed off on the series of transaction. the government alleges that former s.a.c. employee helped the firm avoid losses and bring profits in totaling $276 million by using insider tips he got from a doctor about test results. prosecutors are calling this the most lucrative insider trading scheme ever. and the last time that people said well, of course we do -- what, they pay research organizations. >> expert networks and all this. >> expert networks. people that are paid to know how -- do you could even go and talk to -- i guess can you talk to some of the patients that are in the clinical trial and get some anecdotal evidence? >> you might be allowed to do that. this is different. >> this is the guy who's running it. >> and he's telling the investor what to do.
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the question i have -- and i've known steve coen for a long time. i have a huge amount of respect for him. >> does he know what he's getting? >> thus far they've been trying to go after steve forever. and it always seemed one or two or three steps removed. the way that firm is structured is such that traditionally he has not been involved in trades. however, in this particular case, he seems to have been involved in the trade, at least -- >> maintains plausible deniability. >> he's always maintained plausible deniability. in this case, they described him as portfolio manager a and say he was consulted. if you are going to go make what turned out to be a billion-dollar trade or even a half a billion-dollar trade, someone is going to say why are we doing this? unless you're going to say well, i woke up in the morning and had a hunch that this is a bad id idea -- >> although, if you take that to court proceedings, the idea of trying to prove -- it's still three links, right? this guy who came to stevie cohn
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had information from somebody else. >> you're wondering why it wasn't smart enough to put up a flag. i'm just saying if you're going to make a huge trade, you'll be asking questions about why are we making this trade. >> because we know we're going to be right. >> i hear you. i would have tripled it. i'm trying to ask the butterball turkey the right questions. the one thing about getting old is i don't remember what i asked her last year. don't you have some questions? >> i do. i remember what we asked her last year. >> do you make a turkey? or are you like paul mccartney, do you make some sort of tofu. >> one thing you can't do in the city, which i wish we could do -- >> deep fried turkey. i would love to do a deep fried
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turkey. mark bitman is suggesting that you break the turkey in two and do what he calls a flat turkey. >> it's supposed to be really tasty. >> after it's dead. >> yes, after it's dead. >> pita's not going to like that. how could you actually break a turkey? down middle or front back? >> did you see that pita is protesting the president's pardon? >> i didn't understand that. they said don't pardon him. why? all going down with the ship? >> because it's done anyway. i don't know. it was very strange position to take. >> all right. well, do you have any questions? >> i was going to talk about flattening the turkey. >> she knows a lot. >> i want to know if you flatten the turkey, how do you deal with the stuffing? >> i remember what i asked last year. >> i don't remember everything. >> the stuffing inside, do you stuff it in really night. >> that's right. you don't stuff it in tight. but you also don't stuff it the night before either. >> no. that would be really bad. >> because a lot of stuff can
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grow and even if you cook it, it doesn't kill it, and then you can have that thing that happened to me anyway after thanksgiving. >> let's talk about black friday, too. that day is traditionally the official kickoff to the holiday shopping season, but this year it is starting even earlier. many retailers will be opening tomorrow on thanksgiving. meantim meantim meantime,ecommerce is growing. i guess that's an overall number, going from 15% of overall sales to 18%. we will talk retail in the next half-hour. we have the ceo of toys 'r' us joining us. the national labor relations board says it is unlikely to make any decision on walmart's request to stop worker rallies. the retailer has faced months of protests outside some of its stores. it filed an unfair labor practice complaint last week calling the worker rallies
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unlawful attempts to disrupt its business. wall street's industry funded watchdog is threatening to suspend morgan keagan's license unless it meets certain conditions. it is said the firm is not complying with ruling in favor of retired basketball star horace grant. you remember horace grant? >> i remember him. >> chicago bulls. morgan keagan recently paid grant $1.6 million in a bitter dispute. they say the broker now owes $333,000 in interest. also, news corporation has reportedly expressed interest to cbs about mortgaging the company's book businesses. the talks involved combining harper collins and simon and shuster. a deal is not imminent, but i can say as someone who's married to someone in the book business, we just had the deal between random house and penguin. penguin works on your book.
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>> okay. the fda has approved the first seasonal flu vaccine produced using animal cell culture that. is different from the traditional manufacturing which uses chicken eggs. it's a speedier process, which could help build stockpiles in the event of a pandemic. that's always been the worry that takes too long when you use eggs. flight attendants at u.s. airways voted to authorize a strike to workers that voted down a contract that the airline had proposed twice this year. the airline, as you probably know, andrew loves this story, too, is in talks with american airlines about a potential merger. >> should have done this eight months ago, they would have saved themselves a lot of heartache. this is just dragging out for no reason. >> yeah. you just figure they're meant to be together. >> otherwise amr is meant to be nowhere is sort of the issue. in global market news, japan
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logging its fourth straight trade deficit in october. the european debt crisis with china over a territorial dispute actually reduced exports. and we continue to follow the latest developments out of the middle east. secretary of state hillary clinton traveled to the west bank this morning to meet with palestinian president mahmoud abbas. abbas heads the west bank, while the palestinian militant group hamas controls the gaza strip. hamas is considered a terrorist organization by the united states because it continues to refuse to recognize israel as a state. the united states has a policy of not negotiating with terrorist organizations. that's why she's not speaking with anyone in gaza. her visit comes hours after a meeting with israeli officials that lasted late into the night. let's take a look at the markets this morning. we already showed you the futures. they are down slightly. dow futures down by about 23 points. in europe this morning, you'll see that -- also, by the way, a lot happened yesterday. ben bernanke started talking, when he raised some concerns about the fiscal cliff, that once again put pressure on the
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markets. that's when things turned down yesterday. you'll see in europe, barely budging at this point. in france, the cac is up by about a point. the ftse is down by less than five points. in germany, the dax is up by less than three points. overnight in asia, you'll see that in japan, the nikkei was up by about .8 of a percent. the shanghai composite up by about 1%. the hang seng was up by 1.4%. oil prices also up slightly, up about 72 cents. not near the higher levels that we had seen because of the concerns in the middle east. 84.7 is where wti stands. the ten-year note is yielding 1.661%. we do have those numbers coming out. the dollar sup across the board. euro is at 1.28. gold prices this morning are indicated up just barely up by about $2.60. let's go across the pond.
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ross westgate is standing by for us in london. ross, good morning to you. >> good morning, andrew. good to see you ahead of thanksgiving. becky called it. we're pretty flat here in europe. the dow jones being outpaced a little bit more. as you say, the focus very much on the euro group meeting which broke up in the early hours of today with still no agreement on when to give greece their payment. this time, it isn't greece's fault. they've done everything possible. it's just that we can't get agreement between the imf and the ecb and individual eurozone finance ministers on what the sustained plan should be. we know in the eurozone, they want to push back the debt maturities by a couple of years, maybe reduce interest rate payments. we know they're saying look, the debt is just not sustainable, you're going to have to have debt forgiveness and therefore public sector involvement, some writeoffs and the eurozone finance ministers are not ready for that. angela merkel did come out and
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say look, we can find a way to close the gap here. could expand the use of the esfs. uk bond figures fairly disappointing as well this morning. eight and a half billion for the month of october. analysts were forecasting six billion. puts pressure on the uk chancellor in a couple of weeks. that's where we stand. happy thanksgiving to one and all. >> ross, thank you. you guys don't celebrate thanksgiving over there. they have their own day of thanks. >> they can't stand it. this is one we made good without them. they tried to tax us without representation. >> i think july 4th is probably worse. >> either way, they hate both of those holidays. >> ross, do you hate thanksgiving? >> no, i don't hate thanksgiving. 400 years ago, they gave thanks for the pilgrim fathers to leave, i think. >> there you go. they didn't want us anyway. >> now look what happened. >> oh. he's 007. >> good luck with the turkey, by the way.
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>> thank you, ross. we appreciate it. have a great day or so. we'll see you back here on friday. >> they probably don't like any of our holidays. >> christmas. >> very jealous. >> they have places in london with a good thanksgiving. i remember when i lived in london, ross could participate in this. >> that was big of him. i was going to ask him about thanksgiving, but he extended a happy thanksgiving. >> i could tell it was tinged with a little resentment. >> not from ross. >> still to come on squawk, we have a well-known name to our viewers. jim chanos, he'll be joining us in just a few minutes. before you hit the road, here's your traveler's check. trying to get somewhere for the holiday? according to orbit, here are the busiest airports this thanksgiving weekend. so, which airports may be a lot
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chicago and l.a.x. will be the busiest airports, here are the airports which will be the least busy. >> welcome back, everybody. reynolds wolf is standing by at
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the weather channel. he's got a look at your thanksgiving forecast. what's the forecast like today for all these people who are hitting the roads, trying to fly to the places they want to be tomorrow? >> well, hold on a second. what was that video you just showed about the places that are the least busy? i'm going to show you the places that are the most busy. i'll get to be the bearer of bad news? >> yes, take it away, reynolds. >> the eastern part of the country is going to be just fine. windy conditions can be expected along the carolinas. it's going to be very breezy out there along highway 12. mostly sunny today in the midwest. central plains look good. temperatures in parts of the midwest will be ten to 20 degrees above normal. unfortunately, it's not going to last. we get the wind, the rain, the mountain snow continues. but now, air travel, okay, the bad news. let's begin. in seattle, portland and san francisco, you could see some moderate delays in a few places. don't be surprised, the wind really picks up this afternoon. we do expect it to happen.
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in seattle, you may have some bigger delays. so far, nothing to report. that could change just by sheer volume of traffic. but in terms of air issues weather-wise, it's all going to be out west. these are going to be the two big sores at least travel-wise. let's kick it back to you guys. >> reynolds, thank you. and by the way, have a great thanksgiving. are you back on friday? >> i will be back here on friday. look forward to seeing you guys. >> okay, have a great thanksgiving. we'll see you soon. bernanke, yesterday the fed chief warned that central bankers can't rescue the u.s. economy if it goes over the fiscal cliff. paul is president of financial capital. given that we're talking about this so much with these guys not around, all we do is we keep showing how much time we have as it's ticking down. when they do get back, paul, how do you think that the deal looks if they do put one together, and do they get it done? >> good morning, and happy
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thanksgiving to y'all. we all know it's getting done, whether it gets done before christmas or in january, a deal's going to get done. i think also everyone knows taxes are unfortunately -- taxes are going to go up. i don't know it's going to be at the 250 level. maybe at the 500 or million-dollar level. but taxes are going to go up and expenses are going to get cut. so we all wish they would stop the jawboning and positioning and politicking, sit in a room with dulls, both give in a little bit and move on. but they're going to push and push and push and the markets will push a deal to get it done. >> so if you were trying to decide what to do, would you just stand pat with equities? what would you do? >> you know, we've had to sell off, and for a lot of people that was a good thing. we got down to the 1340 level, which was an interesting level to hold. but a lot of people, as we've talked about over the last three or four months, were on the sidelines and missed. this so they'll have to start
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grabbing some stocks. they've gotten the break that they needed to at least get into this game. but this is a very interesting game that's going on. yesterday, i thought there was an interesting article. dave cote from honeywell, the guy who runs the defense sector there -- >> is he french now? >> no, what's his name? >> very sophisticated. >> they were talking about how defense has to be cut and i think that's an important statement. i think this whole thing starts with the defense cuts and everything else will fall in line. i do think we'll get some resolution on this, whether it spills into the new year doesn't matter. i think everybody is preparing for the imminent tax hike anyway. it's just going to come. on the issue of dividends and capital gains, that will be hung out there, will we go up to the ordinary, i don't think so. i think it will be some
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compromise. it's not that i'm hoping that, but i think that there will be. >> does it matter if we -- so we cave. we're afraid, we don't want anything bad to happen. so we're going to raise some taxes. we're going to cave, but we're not going to really cut spending, we don't want to hurt anyone. this is what we do and no one could fail. you know, a couple years ago -- is it bad that we don't take our medicine now that we have an opportunity to, paul? >> yeah, i think it is bad. we've run out of painless solutions. we've come to the solutions -- we're not going to become greece. i totally dismiss that argument. >> are we just going raise taxes and not cut spending? we got to a huge government ten years ago, and in the last ten years, we probably tripled what we had ten years ago. >> right. and previous obama -- the republicans lost their fiscal prudent way. that was part of the problem. but expenses are going to get
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cut. it's going to be from both sides. no matter what we do, unless we kick the can for six months, it's going to lead to a mild recession. i don't care how you slice it. raising taxes and cutting spending, austerity or revenue increases is not good for the economy in the short term. >> in the long term, that's what we're banking on, that growth someday gets back to 3% or 4%. >> joe, you gave me a great segue here. i'm holding up the speech. it's the ten-year anniversary of the so called bernanke helicopter speech to the day, november 21st, 2002. here it is. and he talks about the fiscal policy -- because i was reading it last night, just to go back. it's amazing what it says in there. really referring to friedman's helicopter drop. but he'll be there. and he told them yesterday, we're not the only game in town now. it's time for the congress to step up. >> speaking of a man who knows another thing or two about
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♪ good morning, and welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin. u.s. futures are kind of flat. looks like yesterday. maybe it is. no, we probably changed the boards. it's exactly what we showed yesterday when we ended down about seven points or so.
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don't expect a lot of action. >> we were up yesterday before we heard from hp. >> we were actually up? >> we were up. we were looking at positive -- because it was the first time you had a big rally and saw the green arrows. it was up and then it was down. does anybody in there remember? >> it was down like 20 and then it went down like 40. >> it changed into six. nonetheless, let's talk about hp. >> the drama surrounding hewlett-packard has another player pointing fingers. mike lynch on "closing bell" late yesterday lashing out at hp's management. >> no, there's no basis here for saying that there's an $8.8 billion difference. that is a massive amount. i don't believe you could do due diligence with all those people, all those experts, many of which those people are still at
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hewlett-packard, of course. and see something missing that was that big and not notice it. the only reason you cannot notice it is it wasn't there. >> hewlett-packard's problems are no surprise to jim chanos, who told cnbc in july that he was shorting hp. >> the reason we got interested in hewlett-packard was not only the macro stuff. one of our biggest positions was autonomy. in london on the short side a year ago. hewlett-packard bought this company for $11 billion. it was a roll-up of software service companies. the accounting was absolutely dreadful. a disaster. they did almost no due diligence on the deal. it closed quickly. oracle was shown the deal in past, and within seven months, the ceo and a number of stock people all left. >> now, jim chanos taking a bow, is joining us right now on the squawk newsline. good morning to you. >> hi, guys, good morning. >> i assume you're feeling
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pretty good this morning. >> well, i don't know about that. but this whole thing is a debacle. and probably should have never happened. as i mentioned, we have been short -- autonomy european fund in 2010 and 2011 and washington horror was taken out a big premium by hewlett-packard. it was one of our absolute favorite shorts at the time. >> do you buy that there is fraud here? hp has not used that phrase specifically, but the s.e.c. and others are looking into this and that's the clear implication. or is this just sort of a convenient way to say boy, did we make a huge mistake and try to blame it on others. >> well, you know, i teach a course on fraud, as you know, and fraud is a bright line. was there intent to deceive on the autonomy folks' part, or was there an intent to deceive by hewlett-packard, or their
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advisers? time will tell. it was pretty cloear if you loo at autonomy's books over time that it was a very, very aggressive roll-up. it was buying other companies. it was writing them down before it bought them and putting all kinds of good will on its books, which for most accounting mavens, and it appears to us that's what autonomy was doing. >> do we just say to ourselves as spectators here or even investors in hp, this was hp's fall, this was their bankers, lawyers, everybody else on the other side who just missed it, or decided to look the other way because they thought this deal was worth doing for whatever reason? >> i think the term would be willful blindness, andrew. this was all apparent if you looked. there were a number of short sellers very skeptical of
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autonomy and even more so if you talked to them in person as opposed to read their research reports. >> i don't know if you heard what mike lynch said yesterday. he came on the air, something people traditionally do not do in the midst of an investigation like this unless they really feel like they are being sandbagged here. he came out swinging, as we just played a clip. what do you make of that? >> well, i don't know, but the evidence is what it is. this is a company that was, as i said, putting on good will on its books. say they would do a $100 million acquisition. they would not only write off entirely the value of the acquisition before they bought it, but then they put on extra good will, so they often put on 150 or 180, just making up an example here, of good will on a $100 million acquisition. so there was all sorts of cookie jar accounting, to use a term that your man herb greenberg likes, that appeared to be going on. and it was hard to miss.
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>> what does this say about present day hewlett-packard? and do you still have a short on the company? >> we are still short hewlett-packard. >> even at this point? okay. >> well, it says that this is a board that i think needs to really do some pretty rigorous self-examination, i would think. >> we need to throw this board out all over again? this board has had, as you know, a tumultuous time already and has had a number of transitions, even over the past two or three years. >> i don't know about "we" since i'm not a shareholder, but i think if i was a shareholder, i would be asking some pretty serious questions at this point. i mean, it's not just autonomy, by the way. they had eds writeoffs. this is a company that, as you know, our thesis was they have been basically offsetting a decline in their business by making acquisitions. in this case, almost disastrous acquisitions. >> where do you stand on meg whitman? >> norfolk opinion on meg whitman. >> but when you say the board has to examine itself, the board was clearly there when this
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action took place, meg was not. >> right. i think she at some point was part of the approval process, as i understand. but that's up to the boards. that's not a short seller to decide. it's the board's decision and they've got to look at this. but again, i think the shareholders have a right to be outraged by what happened here. >> we're going to put a stock chart up real quick, if we could. where do you think this stock goes? how much farther does it have to fall in yourest sna estimation? >> it has a lot of debt. this is a company that that is struggling with its core businesses. let's also not forget that buried in the autonomy disaster was some pretty sobering outlook figures for the company going forward. and i just think until we see whether they have a mobility or a tablet strategy, this is a company that is going to continue to be what we call a value trap.
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>> is there additional headline risk in terms of autonomy or is this something that is just going to go into irrelevancy? >> i'm sure there's headline risk in a he said, she said sort of way, but i think at this point what's going to drive the stock is just the pc business, the printer business and the enterprise business. >> jim, while we have you on the line, wanted to get your thoughts on a different story which also made news. that is this insider trader investigation and more than investigation indictment at s.a.c. capital and whether you think it ultimately will lead to steve coen. this appears to be the first time that he, while not named in the complaint, is referred to as being involved in this trade. do you think that there's some form of malfeasance here? >> oh, i have no idea, andrew. i only know what's in the papers. i don't know anything beyond that. >> traditionally -- i know you
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make all your trades yourself, i think. if you have investors, though, or people working for you who are going to make a big trade and say i want to make a big trade, do you ask questions? you're inside this world. >> well, except that we don't make trades in stocks we haven't done research on. so it's a little bit different. and i don't let junior people make trades at my firm. so you have to be a partner. and it has to be an idea that's already gone past the investment committee. >> have you guys used expert networks in the past? >> we did, and we sort of famously dumped them all early in the millennium because they just didn't like where they were going. they failed miserably in the tech bubble. all of the experts were just as bullish as all of the wall street people. and then i noticed that the marketing sort of changed, that they were advertising sort of access and we were very
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uncomfortable with that. so we figured that was something our own analysts should be doing. and we dropped all our export networks. >> access implies inside -- >> well, it wasn't said that way, joe, but it didn't pass the smell test. >> if you say access, it's like you have access that is nonpublic access. >> former executives, industry people, that sort of thing, it was never specified like that. but it just -- as i said, that's the sort of thing my own analysts should be doing and my clients pay a management fee for us to do. >> you do accounting and you're not trying to figure out whether a clinical trial is working or not. >> and we're not obsessed with what the next quarter's number s -- numbers are going to be either. >> the stuff you do is way too complicated. >> it really isn't, joe.
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>> i'd rather just talk to somebody. >> you were completely right on autonomy -- >> lost money on it. >> lost money because hp came out and bought it. is that when you went short on shares of hp? >> well, we were already looking in 2011 at the pc chain, but i have to tell you, the autonomy acquisition put hewlett-packard at the top of our list. >> so the short on hp, has that made up for what you lost on autonomy? >> i think that would be a fair statement. >> jim, where did you and leishman have dinner or lunch? >> i'm sorry? >> where did you and leishman have dinner or lunch? i'm just wondering where he took you. >> i thought we were going to bring you in on that, joe. >> don't tell me he hasn't paid yet. >> i told him that i would pay. i said i want to have lunch with all you guys, but i'm still waiting. >> so you're not going to pay here. you're not going to call him the welch that he is? >> i don't know. it defends how we define the qe
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and whether this was qe-3 or whatever. i'd be happy to buy steve lunch any time he wants. >> buzz lightyear. if there's any qe between now and inif i infinity, he's basi right. >> jim, thank you for dialing in from london this morning. >> there is turkey up here. i'm going up to edinburgh to have thanksgiving with my daughter. >> check it closely. might be in the shape of a turkey. >> have fun over there. >> see you guys soon. >> by the way, a real quick clarification. i had mentioned -- i used the word indictment. s.a.c. has not been indicted. >> no, the trader. >> the trader has been indicted. >> the firm says it's cooperating. >> just want to make sure that we're all kosher on this day ahead of thanksgiving. there you go. >> it's got nothing to do with kosher. >> it doesn't. you could have a kosher
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thanksgiving meal. >> you could. you could. >> you got to watch what you do, right? any major faux pass? i put mayo on cheese. >> if you wrap the shrimp with bacon and then drink milk, you got a problem. >> really? i love that. i had that this morning. it's weird that you would say that. >> you wonder why you have the issues that you have. >> right. which issues would those be? you're never subjected to those. don't act like you are. >> never subjected? >> you hear about them. you're not subjected to any ill wind or anything. go ahead. >> when we come back, holiday retail, it is no child's play. the ceo of toys 'r' us joins us to talk about opening his stores on thanksgiving, and the prospects for the season. plus, a new new york tradition. today workers are going to be inflating the giant balloons ahead of the macy's thanksgiving day parade.
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there are 16 giant balloons this year, and 49 novelty balloons. got papa smurf, elf on the shelf, hello kitty. they're going to be making their debut appearances in the parade. if you can't make it to the new york city -- >> the other "sesame street" components are going to be there. i did see that statement. is there an elmo balloon? all the "sesame street" is going to be there as is irrespective of the kevin clash news. we can talk about that if you want a little later. >> i don't want to talk about it. >> if you can't make it to the streets of new york city to see the parade in person, nbc is going to have full parade coverage, it starts at 9:00 a.m. eastern. "squawk" will be right back. [ penélope ] i found the best cafe in the world.
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welcome back, everybody. toys r us kicked off black friday early in 2009. and each year, the doors have opened even earlier. tomorrow, the doors open at 8:00 p.m., that's right, on thanksgiving. jerry storj is the company ceo. it's great to see you. >> good morning. >> so, 8:00 p.m., is this the final line how early we're opening. >> well, it's up to our customers, last year we opened at 9:00 p.m., and there were hundreds of people in the stores. we serve families with young children, and they think it's a good idea to go out at a reasonable hour instead of getting up in the middle of the night and trying to sneak out of the house. it also spreads out the crowds, it's a little more fun and exciting. and people love going to toys r
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us on thursday night. >> what's happening with the consumer right now? are people starting to feel the pinch we're hearing about? >> well, i think that we're going to see a spectacular black friday overall here. and we'll know a lot more in a week than we know right now. clearly thanksgiving crept up on people. this is the earliest thanksgiving that can fall on the calendar. earliest possible, and the most number of days between thanksgiving and christmas. >> that's a good thing for retailers. >> it is, but makes it a later season. what we've seen suggests that black friday's going to be huge. all the surveys have said more people are going to shop black friday than ever before. >> why? they're looking for deals. >> they're looking for deals and we're going to give them to them. we're going to make sure this is our biggest black friday sale ever. and it's got 15% more pages in the ad, 200 door busters that start at 8:00 p.m. >> wow. >> we have -- we have for the first 200 families in line we're giving away a goody bag with $30 worth of toys. >> at every store?
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>> in every store. first 200 families get a bag with of $30 worth of toys. >> where are you going? sit. >> 8:00, and we're going to keep adding more and more and more throughout the day. and all the way till cyber monday, which is monday, so we're going to come out of the gate like a chained up horse and get running really fast. >> what does it mean for the store? for the retailer who is actually getting people in. do they spend on everything once they're there. >> i believe they do. we've been working on this all yearlong. this is the toys r us time of year. we have signs in the building that start back in the summer, how many days until black friday? we've been waiting for this, we're excited about this, we think it's going to be huge. >> let's talk about the hot toys. that's always the issue. you have to have the toys people want ahead of time. >> well, the hottest thing we have right now is this. the toys r us tablet called tabio, it plays all the apps that kids love.
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right, so you give them this instead of your ipad and they have a lot of fun with it for $149.99. you can't beat it. it's pretty shock proof. you can drop it, it has parental controls, they can't go anywhere on the internet you don't want them to go. >> is that already on sale? >> it's already on sale and it is very, very hot. >> how many of them are you selling? >> well, we haven't revealed the numbers, but it's a significant number, and a lot more than they started out to make. and we're going to sell more of them. this is butterscotch, junior. i've got him on a mode now so he won't keep doing this all day long. he eats a carrot, responds to you. if you have this, you don't need a cat. >> i have to ask you why you're here. >> yes, sir. >> elmo. >> yeah. >> elmo, you sell a lot of sesame street products. what's this going to do? >> we've seen the sales for sesame product continue to be strong.
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it's been around for a very, very long time. i think you have to separate the characters from the puppeteer. >> we ask because my sons love elmo. >> we're an elmo addicted family and the news that has now officially resigned is sad in our family in some ways. >> sesame street lives on, the characters live on, they've been around for decades. >> you could cast another elmo. you can easily. >> any dropoff in sales? >> none whatsoever. in fact, the leading elmo product this year is one of the hottest -- >> is it "lol" elmo? >> no, it's not. >> i thought the one where he goes like this and goes -- >> they all do that. >> when gilbert godfrey left aflac, they said he couldn't be replaced. >> if there's any one company hitting out of the park, it's lego. very, very hot. there's big news. presenting androgel 1.62%.
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it's open season for stocks. what could boost your portfolio. finding the deals and steals. >> i got it. i got it. what happens when you find a lower price after buying it? we'll explain. and talking turkey. >> that's cold. that's cold and wet. >> the butter ball hot line is open. and they're dishing tips on how to avoid a thanksgiving disaster. the second hour of "squawk box" begins right now. >> good morning, everybody. welcome back to "squawk box" here on cnbc.
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i'm becky quick along with joe kernan and andrew ross-sorkin. so far, a few red arrows, nothing very major at this point, the dow futures down by about 22 points. in your morning headlines today, there is still no deal that's been reached between greece's international leonanders despit all night talks. the banks say they are close to an agreement, but they are not quite there yet. a deal has to be reached before greece can receive any emergency funds. and the explosion of mobile devices is expected to be a big driver of ecommerce this holiday season. online sales should jump by 15% to 18%. next monday is known as cyber monday, and it's expected to see a 30% jump over last year. also, hostess is back in court today. this comes after a mediation session yesterday between hostess and its bankers union that failed to produce an agreement to save the twinkies maker. we'd all been thinking, maybe
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this would be the deal when they got pushed together. but so far, no good. >> when you first heard it's going to happen, it can happen, then it did happen and you thought, oh, wait, there's a mediation. this will be when it does. >> well, because there's 18,500 jobs on the line. not just iconic brands, but 18,500 jobs. >> and the bakers are only a part of those 18,000. the other guys are looking around like, you know -- >> they all had deals. >> held hostage by the bakers. our guest host this morning is one of the world's most influential value investors. chairman, ceo, and chief investment officer. mario, i saw you the other day, it was maria talking about the fiscal cliff. let's just assume that people rise above. and i'm going to give you carte blanc blanche. let's talk about good stocks and fun things. because you think deeply about this stuff. and you're kind of like a master story teller why you like
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certain stocks. what's your favorite right now? >> well, within the framework of making money, today is black friday -- >> yes. >> the stocks today. how do you make money? >> so for buying stocks today? >> yeah. people sell things, there's bargains. if you like it and have the understanding of an intrinsic value. >> if someone is understanding it and selling it. >> well, that is the stock market and the emotions. for example, yesterday, yesterday, patterson, a company based in the minneapolis area -- >> patterson dental -- >> you're getting warm. the stock was down $33 a share. you look at the company, they've not done anything really good for the last four or five years. how do they get business? they sell products for veterinary market, companion pets. dogs and cats -- >> you've been on this pet kick for a while. what's the symbol? >> pdco. >> that is the old patterson dental. >> you got it. >> now in terms of supplies for pets.
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>> well, a three-way mosaic. one, companion pets, companies like shine that sell products through the veterinary market. >> yeah. that's a dental -- >> and as you get older. as the population ages, joe, several things happen. one, they're more sensitive to pets, more money to spend. and this is a good market. second product is dental work. the aging of the population, you have more teeth, more per tooth. >> you have the same number of teeth. >> well, more people. >> are people adding teeth? >> no, but they're keeping them longer. you have 64 teeth. but you spend more money per tooth. and in addition -- >> wisdom? >> joe. >> go on. >> you have none. >> i have one left. >> i lost them all a long time ago. in that framework, here's a company that was plodding along. they're buying back stocks, things are starting to get brighter. and so what's the value of the company if someone takes it up? an analyst whose name i forgot
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on the conference call, the earnings release just yesterday asked them a question. are you going to stop just buying back stock are you going to do something significant? are you going to split the company into three parts? how do we make money in the market? >> i thought there was a third reason for patterson dental. >> well, they have stuff like products for aging for rehab. you need knees, you need a hip. >> they do that too. >> no, they sell the components that you go in and get supplies. so if you want to do a therapy. >> when you say companion pets, you mean cats and dogs. >> well, we leave that out. >> i talked to some of my fish. >> you do a lot. >> i do. >> but 80 million cats and 80 million dogs, that's 160 million of those. that's pretty significant. >> it is. believe me. >> so as a result of that. and you're spending more money and the growth rate of that market. these are hidden markets. we like to talk about housing, autos, we can talk about niches, that's an interesting company,
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you have takeout company there. they're a conduit for inflation because they pass through. now, short-term, you and i are let's say dentists. we sit down with our accountant and say how do we spend money? should we buy that piece of equipment today, or is the accountant going to say, look, your taxes are going to be higher next year? so a lot of the thought process is going on. yesterday, bernanke said he wrote his ph.d. thesis on the element of uncertainty in investment spending. that was interesting. he had 150-page thesis, this was one part of the three parts. there's an element of that. and short-term there's probably some difficulty in doing that. so start adding to products that cater to the companion pet market to the dental market, to the aging process. this is just a sample of that, joe. >> did you come up with this? or did someone in your shop come up to you? >> no, patterson dental started following this 10, 12 years ago.
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>> and owned it off and on since? >> yeah, and we don't own a lot. we probably own 1.5 million shares, bought some yesterday, good news that the stock dropped $3. >> okay. >> and we'd like to have it cheaper. >> all right. what else? >> as an example, let's go back and look at the world. how do you make money? spinoffs, split-ups, liquidations, mergers and acquisitions. a company like sycamore. sycamore was worth $20 billion ten years ago because everybody said it's got the digital revolution. the stock is liquidating the company. the stock's down $2.76. okay. that's -- >> scmr. >> you remember it well, don't you? >> i know, painfully. in any event, let's look at spinoffs, cable vision, they gave you madison square garden. he's splitting up his company and spending money. one of the things he did, bought the yankees. putting valuation -- not the
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yankees, the "s" network. like your content, you're terrific, you guys are worth a lot of money, 12 times ebitda. >> we are? >> you are. >> and basically you know what cnbc earns for the new owners. >> you know what our ebitda number is -- >> $240 million, i don't know what it is. >> what about "squawk box." >> i don't want any inside information here. so murdoch is going to buy you now. >> when we go to break, i'm going to do this -- >> basically, what does that mean for msg? when they have the msg network, it reaffirms what the value is of these cable networks and the value of the sports franchise. somebody bought the dodgers for $2 billion plus, did they buy it for the team or for the -- >> they bought that for the -- >> vanity. >> that was a vanity. >> just do the math. in addition to that -- >> were you wrong on that too? >> i standby the vanity issue. >> you think it was too much?
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mario doesn't seem to think -- >> that was a good deal? they used insurance policies to buy it. >> good point. there's no question it attracts certain types of dynamics. the brooklyn nets is a politically safe way to keep money? or is it a way to get the value of the content by capturing the distribution. because if you get $1 a month for a subscriber watching the knicks and gets back on the nhl, national hockey league, you get incremental revenues. the spinoff was a way to attract attention. is somebody going to buy the channel? the ones -- >> walking dead, right? >> yeah, of course. >> and madmen. >> some people say spinoffs are shuffling of the paper. do you disagree? >> well, it's a fundamental issue with regards to capitalism. and that is should the ceo and the board and the shareholders who elect these individuals allow companies to move assets to the highest form?
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john malone constantly spins off things shuffling paper. looking to not only grow intrinsic value, but allowing it to surface. if you just bought a basket of securities that dr. malone had over the years, you'd have compounded assets at about a 15% the last 20 to 30 years. buffett does something else, buys and holds. irene rosenfeld, i said she's going to buy cadbury, she took it, put it into a package, spun off kraft. mondelez is a fantastic asset. another example, hillshire, sarah lee, we talked about that spinning off. look at the pieces. what are the elements that are worth? hillshire is a company 120 million shares, the stock's around $25, $3 billion market
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cap, basically the company sells protein for breakfast, jimmy dean sausages, the sausage category, how big is it? >> might be a little fat -- >> lunch meat. joe -- >> well, it's sausage. i want it. i eat it, i want it. i'm telling you it's not all protein. this is good. >> hot dogs, joe. >> just sort of in a trance. it's sort of a relief, once in a while, to have mario come and talk about stocks. >> bottom line. >> well, that's what the stock market is. it's a collection of stocks as opposed to buying an etf. do you want to buy a business and get rich? or do you want to trade? in addition to that, what are your taxes, joe? >> oh, now we're going to politics. >> no, we won't. >> no, we're not. it's called capital gains, retained earnings, how do you maintain wealth in an environment? how do you create wealth? how do you create retirement? how do you fund what a college needs to pay for tuition for incoming students? how do they -- >> buffett and taxes, i don't think those two words go
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together. he's never paid a tax, has he? >> he's very good. he's very good at minimizing tax -- >> but the concept of a deferred tax is an engine of growth, capitalism, very fundamental thing. >> we've got 12 times ebitda. that's why we've got to sell these commercials, right? thanks, mario. >> not only commercials, it's a dual revenue stream. >> i know it is, cable. >> i didn't see when you walked on -- >> i know, i didn't get a hug. i got a hug from joe. >> yes, you did. >> unusual. >> andrew and i have yet to do it. >> we'll work on that during the commercial break. in the meantime, the president getting ready to pardon a turkey this afternoon. that's not the case this morning on "squawk box." we prepare you for tomorrow's festivities with the butter ball turkey talk line. coming up next, it's all the rage price matching. courtney reagan's got the story. >> that's right, andrew. we went undercover to see how easy or not it is to get retailers to price match a competitor and which retailers
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best buy is currently offering the lowest price online. how easy is it to get a price match? our own courtney reagan did just that. she did digging and joins us with the results. you were like undercover shopper. >> we did. we had to go undercover. and nobody wants to overpay for a holiday gift. and one way to avoid that, buyers remorse is research the prices for the big-ticket items online. a lot of places say they will match prices, we did shopping of our own to see who makes it easiest. and so we didn't get any special treatment like we said, we did go undercover with our cameras rolling. >> reporter: we chose this sony bluray dvd player and three major retailers. a little online research shows target pricing the dvd player at $139.99. walmart's selling the same one for $129. and best buy offers a special price that you can only see at
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checkout, slightly annoying, but it is the cheapest by $31 at $108.99. armed with our printout from our best buy deal, we make our first stop, walmart in secaucus, new jersey. we found the player in stock and asked if they would price match. >> so this sony bluray player is at best buy but for $109, the list price here is $138, can you price match? >> walmart made it easy. next, we visited target in new jersey. >> you guys here at target have it for $139, but i found the same dvd player online at bestbuy.com. so will you price match that? >> no. we only match the ads in the flyer. >> at first, they turn our producer down, but when she presses him further, he calls the manager.
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>> it is for today, yes. >> it's an interesting wrinkle did happen at walmart at the checkout, when we took the bluray player up, it rang up $98, $30 cheaper than it was listed. they didn't have to price match, but they were willing to do it. >> push, push, push, but it's got to be today's date. >> you've got to have a date on whatever you bring in. if you're not happy with what the associate is telling you, you can always ask for a manager. and target seemed to be the most expensive every time, but only by about $1. >> okay. how -- why didn't you just buy it online to begin with? when you find the cheap price online? >> and there would be no video, no segments. >> but also, some people don't want to wait for the shipping, they might need it right then. >> get it that day. >> and that's when it can win. the people who physically want it in hand. what if it doesn't make it, what if there's another storm. >> you follow this stuff really closely, what's the sense from the retailers in what they expect from the consumers this
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year? they think it's going to be a good one, they think it's going to be an unnerving one. >> like we've been saying about a lot of things, cautiously optimistic, i think they're hopeful, but realize how competitive it is and they're watching each other very closely. because if you notice once one announced the layaway program, everybody did. and there's nuances for each of the programs, so you're going to want to read the fine print and really push, be polite and push, and more than likely, they're willing to do what it takes to make that sale. >> we had jerry from toys r us this morning and he and joe were talking about the longest number of days between thanksgiving and christmas, which is great news because it means more shopping days, but he says a lot of times that means shoppers wait until the end. they're not going to be doing shopping right away. >> exactly. >> if we're playing a chicken and egg game. >> it seems to be good prices right now and the closer you get
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to christmas. macy's is holding back inventory, talking about introducing product newness as you get closer and closer to the holiday. to worry too is that you panic and promote more than you need to. >> kills your margins. >> it's a timing game too. >> will they end with less inventory? >> this year, they're in really good shape because i think they've learned some lessons in the years past where they've had way too much inventory. i think that's also a lesson for consumers. if you see something, you might want to buy it right then because the inventories aren't as full as they've been in years past. retailers don't want to get stuck with that extra inventory. >> get it if you don't buy it now. >> courtney, thank you for that. >> thank you. coming up, giving thanks so small business. chief economist bill dunkelberg
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will join us. and then at the top of the next hour, former wells fargo chairman and ceo dick kovacevich is going to join us. time now for today's aflac trivia question. the term franksgiving was named after which famous u.s. figure? the answer when "squawk box" continues. yeah, how will you pay for things like food... electricity? dental bills... gazooks. you need a back-up plan. [ santa ] ho, ho, ho. that's why we have aflac! so i'll have cash to help pay bills! great...but what if you're still not better by christmas? hmm... afllaaccccccccc!!!!!!! [ male announcer ] aflac. we've got you under our wing. rudolph's better... but now blitzen's sick!
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now the answer to today's aflac trivia question. the term franksgiving used to mock the government's attempt to commercialize thanksgiving was named after u.s. figure? the answer, franklin d. roosevelt. >> aflac. >> comments, questions about anything you see here on "squawk," shoot an e-mail to squawk@cnbc.com, follow us on twitter @squawkcnbc. coming up, talking gold,
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oil, and equities, the trading block to get you ready for turkey day trades. "squawk's" coming back in a few moments. coming up, "squawk" serves up the perfect turkey. it's a traditional interview with the butter ball turkey top line from stuffing to basting to all the fixings. get last-minute tips to set the perfect table right here on "squawk box." olaf gets great rewards for his small business! pizza! [ garth ] olaf's small business earns 2% cash back on every purchase, every day! helium delivery. put it on my spark card! [ pop! ] [ garth ] why settle for less? great businesses deserve great rewards! awesome!!! [ male announcer ] the spark business card from capital one. choose unlimited rewards with 2% cash back or double miles on every purchase, every day! what's in your wallet?
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welcome back to "squawk box" this morning. let's get you through some of the headlines as we get ready for the last day of trading, the full day of trading, the labor department's weekly report on jobless claims a day early. that report out in about an hour expected to drop to 430,000 for last week, that's down from 439,000 the week before. and mortgage applications falling 2.2% last week according to the mortgage bankers association that was driven by a decrease in refinancing activity with applications for new home purchases rising by 3.2%. and some more bad news for research in motion, they may be losing another major blackberry
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customer. reporting that the national transportation safety board now considering dropping the blackberry for its workers in favor of apples iphone. the ntsb citing reliability problems. so, becky, another one -- >> not me. i'm still -- >> bites the dust. >> i'm holding on to it. i know joe's got his. we're going to be the last two people holding our blackberry going down with the ship. >> someone was on yesterday had an iphone and -- someone sitting here. they had both. an iphone and a blackberry. >> that's what i do. >> you got both. >> i got both. >> then you walk around like a gun slinger. >> no, i have a blazer, a coat -- >> got a vest -- you have a vest with lapels. >> what did you think of that? >> horrible. you couldn't get it off fast enough when you got here today. had like pockets all over. >> i'm a big fan of ali velshi. >> that's who you look like. >> too much. >> oh, my word. >> i was going with it for about
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30 seconds. no, no, no, take it off. >> you should put it on. >> put it on to show people. >> all right. all right. you've got to stick around. >> show people what a complete mooch you are. >> no, i admire him trying new ideas. >> i'll go get it. >> it's like seinfeld, looks good on you. does it look good on me? >> andrew's going to come back, show this off. and i like that he's trying new things. i'm glad he left -- >> you're very kind. you're very kind. >> it's the countdown, millions of people hitting the roads, skies, and rails today to try to get in place for thanksgiving. our phil lebeau is on the holiday travel beat and joins us with more right now. how do things look in chicago right now, phil? >> it's foggy here, becky. so i think a lot of people are looking at the boards and saying, hmm, hopefully we're not delayed. no cancellations we've seen so far. and you can see here at o'hare, the security lines filling up as they do every thanksgiving. looking at thanksgiving travel
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this year, just over 43 million people will be hitting the road for at least 15 miles. that's a slight increase from last year. but they're spending less this year. just under $500, a drop of 10% according to aaa. and first of all, in terms of how many people will be traveling this year, the majority as it always is are going by car. and there's an increase, 39.1 million people will be driving at least 50 miles this year. that's the highest number of people using car to travel for thanksgiving since 2007. in large part, gasoline relatively stable, $3.41 a gallon on average. that's a smidge higher than it was last year. that's the good news for those who track thanksgiving travel. the bad news, take a look at what we're seeing in terms of the airlines. travel is going to be down about 1.7% this year. part of that is because of restricted capacity, and also, people don't want to spend as much for airline tickets. the lowest u.s. round trip airfare. this is the interesting part, coming in at $188, that's down 11% compared to last year, still, we're going to see a
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decline in the terms of the number of people flying, the fewest people since 2009. and guys, one last story regarding holiday travel this year, particularly in your part of the country, the rental car companies, a lot of people like to buy -- not buy, rent a car for the weekend. you can't do that very easily. in fact, you probably can't do that at all if you haven't gotten one by now the northeast. this is the hangover effect from hurricane sandy, superstorm sandy. all of the rental car companies, they're gone. they're spoken for. all of the cars. so as a result, if you or somebody who is making last-minute plans and said, well, i'm going to rent a car. good luck, you're not going to be able to get one in the new york/new jersey area and a good chunk of the northeast. >> look for a car pool. how long is that expected to last, phil? >> well, this is what we usually see around thanksgiving. and all of the holidays, you see all the rental car companies, for the most part, not
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completely sold out, but they fill up. and this year because of sandy, they are sold out. one interesting note, an increase in the number of people taking buses and trains this year in part because of what we're seeing with the rental car companies. >> thank you. we'll check in with you later. >> it's good for tires. >> it is good for tires. you like that. >> well, i like pep boys. >> do you have some? >> i bought it. >> do you have music? >> do we have music? that's it, that's good. >> hold on, it's hard to get to the other side. >> look at the lining. >> are you good with this? >> turn around, let me see. >> it's a very weird look. >> the back is a little wild. >> it's a little wild. it's a british company. it looks awful, actually. >> i like the front better than the back. >> it looks particularly bad. >> i like the front better than the back. >> now you're in position of having to take off your clothes. go ahead.
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>> it's got lapels. you've got to leave it on. you've got to move your rise above pin. >> it has lapels. >> you do a lot of pockets. >> with respect to ali velshi, i have to -- >> does he wear -- my god, look at the back of it. >> the back of it's kind of crazy. >> you look like some kind of wild animal. >> it's a british thing. my point was, where did you buy that thing? where did you buy the suit? >> who was it? who was the british guy who does this? >> was there a suit salesman? >> yes, there was -- >> he was standing in front of a mirror -- >> no, i -- >> was it a girl selling it to you who said, wow, that looks good? and you went really? and they went yeah. and you finally talked yourself into it. >> my thought was i was never going to wear the three-piece part. the blazer part, just the suit with the pants, it's okay. >> that's interesting. but now you're in the position of having taken off your clothes on television. >> there you go. >> do anything to get that
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ebitda up. what is that? >> i'm worried it's probably hurting the ebitda. to be honest. >> you know, you guys your own ratings, i would say that -- >> what's the maker? >> i thought i had to deal with the fiscal cliff, but undressing. >> you will. it's got like a stripy thing going on. let's get an outlook on the markets. right now we have daniel from tjm institute. we've been watching what happens with the futures every day. a lot of concerns about the fiscal cliff, is that the biggest issue driving things right now? >> the fiscal cliff is the driving issue right now. a little fear from europe. the market came off. that is in the background. as long as we're seeing things move forward, but not negative on the fiscal cliff, i think you'll see the market bounce against this 87 and 90 level. any hint of a compromise, yo ur goi
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you're going to break the 1,400 level. >> okay. 20 to 22 area. every time these talks come in, though, we know it's going to be a lot of turbulence between now and let's say the middle of december or some time, that'd be the earliest. are you following every single trade? are you thinking eventually there'll be a deal that gets done? >> i think eventually there will be a deal that gets done. and i kind of like the fact it's been quiet lately because it means -- it seems to me that means they're working at something. you're not going to get a grand compromise early on, but you're going to get something reasonably substantial. and next year when we have the new congress, things will get together. you start seeing that, then we start going off pretty good to the upside. >> of course, dan, everyone has said if there's this idea that washington can come together and define some sort of solution, that will make the markets buy into this confidence in washington. washington has big problems, and the solutions are probably going
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to mean painful medicine around. is there a moment when the markets wake up and realize and say, oh, my gosh, we have to realize we are talking about spending cuts, higher taxes and combination of these two things could lead to some troubling times for the markets too? >> well, that's going to be found out once the deal is in. let's say they had some sort of a deal and you start breaking it down. you'll have to look at how is it going to impact the economy? i imagine they're going to do it to minimize whatever impact there is. it seems to me, there's growth in this economy and we're looking for a place to spring board from it. so they're not going to want to ruin that chance. but until the details are out, we're really not going to want to know. >> we have not talked fiscal cliff with you in-depth on these things. what it means for the markets now, the changes, potential tax law changes could mean. what are you hopeful about? what are you worried about? >> for the next five years, ten years, a very simple model. you have to raise revenues, lower expenses, and grow the economy. but the economy is not isolated.
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and the global economy is important. how does the u.s. participate? so we have to keep an eye on europe, we can't ignore it. you have to keep an eye on china. china's going to step on the accelerator in march if not earlier. and within the framework of the next ten years, can we regain our economic prowess? and that's priority number one. if you have these guys in new york, mayor bloomberg, mayor booker, the mayor, the governors, cuomo, christie, malloy, if they went on holiday while we had sandy, what would you do? we have an economic crisis. they're going to take a short break in december. yeah, we have to have a patch, but we have to have a fix. and a structural fix is so fundamental so that if you're running a business and you have clarity and visibility for the next five years, you can live with whatever you have. corporate taxes are coming down according to the current
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administration. you drop them from 35% to 28% or 25% if it's u.s. manufacturing. that is very helpful for profits of certain companies. >> but you close the loopholes, meaning those who aren't -- >> you have to. come on, lobbyists have put in too many loopholes at the corporate level, they snuck them in, carried interest, carried interest is a disgrace. three years, it's not even patched. notwithstanding if you're a hedge fund, a private equity, i mean, you going to harvest your investments. someone else was selling a piece of charter communications. why? they want to get the carried interest. they don't want to pay the extra tax. however, there's no question, 71% of the economy is the consumer. 13% is investment. balance is government spending and exports. the consumer's a function of jobs, psychology, cash. housing yesterday, bernanke echoed the notion of a positive feedback loop on housing, very fundamental to jobs and net worth. >> we're going to talk more about that, but dan, thank you
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for joining us and happy thanksgiving. >> when we return, we're going to do small business in search of solutions to the fiscal cliff, nfib chief economist is going to join us and then we're going to serve up turkey tips for the butter ball turkey talk line. how much stuffing, should you tie the legs, when should you baste? those questions and much, much more. i want to talk about fried turkey when we return. [ male announcer ] how do you trade?
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welcome back to "squawk." as we try to rise above uncertainty. yesterday, the ceo of charlie's grilled subs talk about the importance of getting a deal done in washington. >> they're the ones on the front lines hiring employees, making decisions about whether they're going to buy new equipment or going to build another location. and they'd like to know what kind of environment they're operating in. so these are important issues for them. and they do affect them. they affect them personally, their families and the families of the people that work for them. >> joining us now to rise above and talk small business, the chief economist at the national federation of independent businesses, and good morning to you. >> good morning and happy thanksgiving to everybody. >> happy thanksgiving. your sense on the fiscal cliff impacting small business right
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now. we saw an article earlier this week talking about big corporations slowing down purchases, but we still haven't -- it's not clear it's impacted the consumer and i want to get a sense from you of how it's really impacting smaller businesses. >> well, of course, consumer spending wasn't very strong in the third quarter. in particular, the services sector grew only .8%. and that's a big small business sector, and that's 70% of the 71% of gdp that's consumption. so that's very important. we haven't really seen much of a pick up in spending there. and that's very important. we'll see what happens to consumer optimism. but owner optimism is going to be important here going forward. and i think that's really a key. >> i saw in your report, small business optimism did rise. how do you think about that in a relative basis for this fiscal cliff we're approaching? >> yeah, it did rise .3%.
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basically really unchanged from september. the average going into 2008 was 100. we haven't been over 95 in the whole recovery period. we're really in recession levels still. one of the questions we ask is do you think business conditions will be better or worse six months from now than today? 14 p account in october said better, 19% said worse, and 23%, a record high said i don't have a clue whether it's going to be better or worse. so how am i going to do anything? with all that uncertainty, what everybody does is sit tight, keep their powder dry. >> is it a function of revenues or a function of sales that traffic is a function of customers coming in? or a function of their uncertainty over taxes? >> well, it's all of those things. >> you put a percentage on that. >> let me put numbers on there for you. >> great. >> we have 15 percentage points more of our owners saying quarter on quarter sales are
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headed down than say they're headed up. sales trends have been weak as the gdp numbers kind of suggest. in terms of their most important problems, of course, health care costs are number one out of 75 options we give them. number two is uncertainty about the economy, number three is energy costs, number four is uncertainty about government policy. number five is the cost of useless regulations and red tape. six, seven, and eight are frequent changes in the tax code. tax code complexity, and taxes take away the money, my earnings that i use to grow my business. they're the issues that we're concerned about. >> bill, you said taxes are six, seven, and eight, so they're not in the one, two, or three category. which i might imagine given that's a huge issue going into 2013. >> well, it certainly is. and when we took the survey earlier this year, of course, maybe the fiscal cliff issue wasn't quite as big a point. right now -- yeah, this is a survey, the big one was 75 items, we only do once every five years and, of course,
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health care costs which is you could look at as a tax, if you will, is at the top of the list for the last 25 years, you have to go back to the early '80s to get interest costs up there. remember the 21% prime and the difficulty in getting credit back in those days. >> when's your next comprehensive survey, bill. >> well, the november survey's going to be interesting because through october, of course, we didn't have the outcome of the election in that survey. and now we'll be able to carve out the east coast and see what sandy did to all the numbers, as well. so we'll have to wait a couple more weeks until we get the november survey in and then we'll have a really pretty good idea about where things stand. my guess is, it's going to be more pessimism here. obviously it depends on what you were hoping for in the election and what that mix all looks like. but i'm expecting optimism to fall. and, of course, we'll have no more resolution on taxes or any of those things because it's too soon really to get those done.
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but, you know, 75% of these small businesses out there are paying their taxes on the personal schedule. they're worrying about that, want to know how to calculate after tax returns on hiring or investment when you don't know what the tax rate's going to be. >> we wish you a happy thanksgiving. >> well, same to all of you. thank you very much. >> see you soon. when we come back, we have a "squawk" tradition. joe has a list of questions ready to go for the butter ball turkey. that's here on "squawk." americans believe they should be in charge of their own future. how they'll live tomorrow. for more than 116 years, ameriprise financial has worked for their clients' futures. helping millions of americans retire on their terms. when they want. where they want. doing what they want.
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time to talk turkey as we continue the "squawk box" traditions other than me. it's kind of like a wonderful life this package every year. >> all right, thanksgiving, my job is to prepare the perfect turkey. happens every year. the first thing, cleanliness is next to godliness. someone else is going to have to turn this off. all right. there we go. here's the turkey, here's my stuffing. is this back here, right?
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might want to cough a little bit. oh, that's cold. that's cold and wet. and you really want to stuff it in here. in other words, you really want to pack it. hold on a second. almost done here. all right. ready to go now. >> joining us -- can't believe what she just saw. with her tips on preparing the perfect turkey is sue smith. butter ball's talk line expert. live from butter ball's headquarters in illinois. i did not know, back then, sue, packing the stuffing is probably not the best idea for the stuffing, is it? >> a lot of people do like the stuff, but good question, you want to stuff just lightly and that'll bring me to my first golden tip, make sure you use that meat thermometer, make sure that stuffing gets to 165 and
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make sure that thigh meat gets the 180 and breast meat gets to 165, 170. >> and if someone stuffs it the night before, that's the worst thing you can do. do you stand by that? >> if you're going to stuff it, it's a great way to do it, it's tradition. if your mom's done it, you're going to stuff. but yes, you want to prepare it that morning and stuff it right before you put it in the oven. >> does it ferment or something if you do it overnight? you don't want can grow in there overnight, is that it? >> you don't. definitely do prep for food safety. techniques and stuff it right before. >> what if i want to do something different this year? do you got any ideas about different spices or anything out of the ordinary that you might use with your bird this year, sue? >> yeah, there's a lot of different ways, like to spice it up. salt and pepper, but a lot of people like to put garlic or sage or rosemary, and this year
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we have a brand new app. it's real exciting, the butter ball cook book plus, and they have so many good recipes and ideas and how to advice. it'd be a great place to get different ways to prepare your turkey this year and great leftovers which i'll definitely be using for friday and the weekend. >> you going to ask about the deep fried thing? >> not yet. i want to know how you feel about a flat turkey. you've got to break the turkey. it's not going to look the same when it's at the table. but i'm told -- >> a flat turkey? >> a flat turkey. supposedly you break the turkey in half and cook it flat. suggesting that the flavor is much better. what do you think? >> yeah, a lot of people like to take off the thighs and wings, it's a great way to do it. it's a little labor intensive. the butter ball turkeys, leave it whole, it's real easy. just brush it with some vegetable oil. that's going to give it that nice golden brown.
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>> how do you feel about indoor fryers? >> those are great. indoor fryers, outdoor fryers. >> i'm afraid of those. >> it's great, it's quick. it's about 3 1/2 minutes or minutes per pound. >> and you take the stuff and the paper out before you cook it too. >> yes, you do. >> remove that. don't leave that in. >> remove it. >> what's the best alcohol to drink -- besides wild turkey. was there a stuff -- red or white, sue? >> you can go either way. chardonnay's great with a turkey. so it's really, you know, it's a good thing to have your guests bring too. they can bring their favorite wine or cocktail and have a good time with it. >> they should bring something. besides just -- >> that's right. you shouldn't do all the work. >> it's all about spending time with the family. >> well, i'm a bourbon and butter ball guy. >> you're bourbon and anything. >> it's true. >> sue, thank you very much.
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we appreciate it. once again, we always have fun. thank you. >> have a happy thanksgiving. >> you too. >> you're going to see that very quickly the futures are still a little bit lower. dow futures down by about 37 points right now. we do have breaking economic news. jobless claims are being released a day early because of thanksgiving. we'll have the number and market reaction just ahead. ing the new dell xps 12. part of a whole new line of tablets from dell. it's changing the conversation. ♪ we create easy-to-use, powerful trading tools for all. look at these streaming charts! they're totally customizable and they let you visualize what might happen next. that's genius! we knew you needed a platform that could really help you elevate your trading. so we built it. chances of making this? it's a lot easier to find out if a trade is potentially profitable. just use our trade & probability calculator and there it is.
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rise above. corporate bosses are calling on political leaders to take action to avert the fiscal cliff. and if you're looking for a straight-shooting voice on this topic, we have him in studio today. dick kovacevich is our news maker of the hour. plus, breaking economic news. weekly jobless claims now just about 30 minutes away. and money manager mario cabeli is ready to gobble up a few more stocks. >> we like to talk about housing, autos, we can talk about niches. >> before you head over the hills and through the woods to grandmother's house, you go the final hour of "squawk box" begins right now.
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>> welcome back to "squawk box" here on cnbc first in business worldwide, i'm joe kernan along with becky quick and andrew ross-sorkin. our guest host mario cabelli. a lot to discuss with him. first, though, becky has a couple of headlines. greece's international lenders failing to reach a deal to reduce the country's debt, and released its next bailout payment. the eurozone finance ministers, the imf and central bank are going to be gathering again on monday, but they need a deal before they can pay out any more of that money out to greece. that is causing consternation. also, back here in the united states, hostess brands is proceeding with the plan to go out of business. the maker of twinkies says that last-minute talks broke down yesterday. a hearing with the bankruptcy judge is set for 11:00 eastern this morning. kayla tausche will join us from there in the next half hour. and the fbi and s.e.c. are
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probing allegations about hewlett-packard's purchase of autonomy. saying it was the victim of a multibillion dollar fraud, they didn't use the word fraud, but every word short of fraud. they say that they were -- they had uncovered huge accounting issues at the british company it bought last year. in the meantime, autonomy founder and former ceo told cnbc he was shocked by these allegations and blamed h.p. for mismanagement. this summer, they were called the ultimate value trap, warning about the alpha conference. h he joined us on the line this morning. >> it was pretty clear if you looked at autonomy's books over time that it was in a very, very aggressive roll-up. it was buying other companies, it was writing them down before it bought them and putting all kinds of good will on its books. which for most accounting mai i
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way to play earnings games going forward. it appears us to us that's what autonomy was doing. >> he said he watched in horror as hp paid a huge premium on that stock. ended up shorting hp shares and i think he's made back even more than he lost on the autonomy deal by shorting hp. he says she's still short those hp shares today. >> and ben bernanke taking on the topic of the fiscal cliff. and warning what could happen. >> the realization of the automatic tax increases and spending cuts absent offsetting changes would pose a substantial threat to the recovery, indeed by the reckoning of the budget office and the cbo and many outside observers, a fiscal shock would send the economy toppling back into recession. >> our newsmaker this morning, dick kovacevich, we're thrilled to have imhad.
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happy thanksgiving, thank you for being here. if you were running wells right now, in the midst of this debate about the fiscal cliff, what type of preparations -- take us sort of behind the scenes. what is a bank doing right now ahead of this to keep itself afloat -- not afloat, but what are the sort of preparations that need to be done? >> well, i think you're watching to see the likelihood of going over -- not going over the cliff. and its impact on the various businesses you have. the credit risk of what happened to the housing markets, et cetera. and you have to make that decision of do you bet one way or the other? or do you not bet at all? and, you know -- >> so what is your bet? >> my bet is that we can solve this. >> before january 1st? >> exactly. >> now, the bet is that the
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public is so fed up with washington that they're going to scare the politicians to not play politics and do the right thing. and that's my hope is that they -- they now realize that they have to do something. both parties because the public is going to be very, very displeased if they don't get this. >> what form do you think it takes? >> well, i think there's four things you need to do. and all of these are very doable, can be done by the end of december. it starts with, we do have partisanship, and republicans are not going to convince the democrats to their side and the democrats aren't going to convince republicans, so it has to be a compromise. and we don't have time to start all over. so we have to look at what compromises have already -- are on the table and can they do the job? and i believe they can't. the first compromise is simpson/bowles, and i think the idea of $1 trillion in revenue and $3 trillion in expenses is
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doable, it's a good start, it's probably not perfect. maybe you make some changes around the edges, but you start with that program and say, okay, how can we get together on that? simpson/bowles also starts to rein in the costs of social security and the entitlements with that with some very reasonable things that have been around the table for a long time. what it doesn't do is address medicare. and yet the ryan compromise is on the table. so those are the things i would start with. but importantly, just having an expense reduction and trying to rein in our deficit isn't going to solve any of our future problems, and certainly not entitlement. you've got to create a growth commission. and what the growth commission would do is to determine what is
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needed, what are the -- what's the environment needed to cause our gdp to grow at 3% to 4% instead of 1% to 2%. and they would address things like tax reform, education, immigration, all things that effect the economy. thirdly, there's $1.5 trillion overseas as we know on corporate balance sheets that's not going to come to the united states unless we allow it to come at less than 35% tax rate. what i would do is have a 10% surcharge to bring that money back home. >> is that a one-time holiday? >> i'll get to that. and that would bring in immediately $100 billion to $150 billion which should only be used to reduce the deficit. but i would then permanently put in and tell the growth commission comes out with maybe a better program, but immediately that you can bring it home in the future at half the corporate tax rate or 10%, whichever is less. and finally, and this is very important. i would get agreement that there
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will be no laws passed that will either increase the cost to corporations, increase the tax rate, increase regulations until the unemployment rate falls below 6%. this would give certainty to the future and i'd even suspend some of the past ones, but that may be too much. and if you did all of these things, very doable, you avoid the fiscal cliff and you get started down the right path to more extensive changes that the growth commission would address. >> let me ask you a question about housing and the mortgage market. part of simpson/bowles and part of the conversation that people are having is about limiting deductions on mortgages. >> right. >> maybe going from $1 million to $500,000 or perhaps lower. what do you think the real implication on the economy is as a result? >> well, it would have some implication. i actually like the idea of a cap on deductions. so that people who -- where this
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is important, where the mortgage is important would still do a mortgage. somebody that's making donations that may be important to them. i think it's much better to use this whatever you want to use so it'll have a lesser impact because people will select what is most important to them. >> the problem with housing is if you can't deduct your interest, the $1 million right now is the maximum -- >> and you can do that on up to two homes. >> the second part is the taxes you pay on your home you also deduct. if they're going to limit that, that is a challenge that you can't overcome. it is a part of the economic model that will create jobs and it's on a takeoff stage, you're going to kill it. >> i'm not sure i agree with that. the alternative is rent. rent has to pay the interest.
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doesn't get deducted by the payer of the rent. they have to pay the taxes, they don't get deduction for that. so your alternative is already based into the rental cost. and you have to live somewhere. which way do you want to do it? we know that people rent all the time. the alternative is you're going to sleep on the street. >> go to grandma's. >> well, some of that will happen. >> i really do think we can -- for most people, if you're talking about the average house is $200,000 in an average estate, real estate taxes in estate, if you have a maximum 17,000, 25,000, you'll be able to deduct all the things you need to deduct. >> we're not going to get simpson/bowles by january 1st. how do you fix the cliff? >> well, all kinds -- it's infini infinite, obviously. but i just don't -- i think it's the wrong approach. we've been kicking this can down the road for two years.
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>> you know what we should do and what you'd like, but what are we likely to be able to get done between the house republicans and president obama? >> well -- >> what's likely to be done to avert -- and will we avert the fiscal cliff? >> you will create $400 billion worth of revenue and avoid $100 billion of expenses, you know. you'll figure that out. >> you get to revenue how? >> you would get the revenue by implementing the higher tax rates for higher income people. and you would say that you're going to address tax reform in march or april or june and -- >> what do you think the house would agree to? 500,000? up two points? that's the latest thing they're talking about. >> something of that order. >> 500,000. >> i think it's the wrong approach. >> i do too. but we've got to do something. >> and if you say the framework is we're going to address on the
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broader issue of the tax code, if we do that later, what makes that happen? you said we've been kicking the can down the road for two years. the fiscal cliff was supposed to be the gun at their heads to make this happen by now. >> i think they'll agree -- they'll have to agree on how much revenue they're going to generate by some means in the future and how much expenses they're going to address and what they're going to do on entitlements. and they'll say, i'm going to -- we're going to address all three of those and we'll generate at least $1 trillion in revenue and reduce expenses by $4 trillion, which is what we said last time, right, and put in another fiscal cliff. >> i thought it was 3-1 last time. $4 trillion overall, $1 trillion from revenue increases. >> they didn't get the medicare, and that's why they never put together. you've got to address medicare. >> that deal's off the table and we don't know if it was on the table as far as the president's concerned. he's at now -- let's see, he's at 1.6 now, he wants in revenue,
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and four total, that's $2.4 trillion and $1.6 trillion. and also, you've got guys like trumpka and the aarp and across the board everyone saying, we just want higher taxes and the entitlements stay the way they are. that's their bargaining position. >> the idea was out there two days ago, yesterday the idea was that rush limbaugh was moving closer to this idea that you could raise taxes in some way. he came out and said, no way. >> i know, rush -- he's not even an elected official. >> the idea that there had been two days ago talk about thawing around the edges, the more i thought maybe that's not the case. >> i think it's posturing. they have to do something. this is very serious and i'm saying, i think the public is fed up and they're going to -- >> dick, going back to the clinton tax rates for everybody is one part of the cliff. that's not the end of the world. if you were to do something on
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the sequester where you just -- >> it wouldn't be the end of the world if we weren't in the midst of a recession. this is a major impact on spending. i mean, you're talking about -- >> when is a good time to go back to those tax rates, then? >> i think in the future. >> 4% -- goes down 2%, then you cut your 4% growth to 2%, no one wants to do that, if you're at 2%, you cut it to 0%, there's never a good time to bring back taxes on the middle class. >> i think once the economy is going and unemployment is lower, is what you do. and you put it into the future. you say that, you know, when unemployment is below 6% or something -- whatever you want -- >> just to me, looks like both sides are -- the president definitely looks more intractable on the high end letting those expire. and the house guys, that i think they're the last fire wall now against socialism. they're going to say no. >> i think it's posture. >> both sides, there are -- you know, in both parties, there are people that say let's go, baby.
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let's go over the cliff. >> you hear it all the time now. >> i agree with you. i agree with you. they were going over the cliff the last two years. >> we tell them they've got to do and over here, we have time, we'll make -- we'll kick it -- put it out in the future again. we'll make plans to make some plans. but it might be, i don't know, sooner or later we've got to do it. >> that's what i'm saying. and i think we have to start now. if we don't start now, i think it's going to be very serious. >> it's going to be interesting. there's two issues. fiscal cliff, fiscal abyss. you've outlined a lot of ways what we need to do, but we've got january 1st. how many days? >> 40. >> 40 days and 40 nights. >> that includes all the holidays. >> 40 days. >> they've all been addressed, put their positions in, that's why you have to start with things that have already been talked about. >> let's take a very quick commercial break. when we come back, we will
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continue this conversation with former wells fargo chairman and ceo dick kovacevich. also mario gabelli, take a look at the "squawk box" market indicator. wow, not often you see that. markets indicated flat. you can see s&p futures are down by less than a point. ten-year note is also flat at this point. crude oil up by just about $1. and gold up by $3.90. tdd#: 1-800-345-2550 when i'm trading, i'm totally focused. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 gives me tools that help me find opportunities more easily. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer. tdd#: 1-800-345-2550 and with schwab mobile, tdd#: 1-800-345-2550 i can focus on trading anyplace, anytime... tdd#: 1-800-345-2550 until i choose to focus on something else. tdd#: 1-800-345-2550 trade at charles schwab for $8.95 a trade. tdd#: 1-800-345-2550 open an account and trade up to tdd#: 1-800-345-2550 6 months commission-free online equity trading tdd#: 1-800-345-2550 with a $50,000 deposit. tdd#: 1-800-345-2550 call 1-800-836-8799. if we want to improve our schools...
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welcome back, everybody. we continued our conversation with dick kovacevich right through this commercial break. one of the things you said at the top of the last block was that housing would be in a tough position if we go over the fiscal cliff. could you lay out what it looks like if we do. what are the real numbers? >> because it's starting to come back. and the fiscal cliff, unemployment is going to go up dramatically. the only real way to get housing booming again is you've got to get unemployment down. and people, and it's not just the unemployed. you've got to make sure that the people that are employed have confidence they're going to continue to be employed.
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so housing is the greatest value we've ever had in the last 50 years with the low interest rates and the cost of housing. but if you're afraid you're going to lose your job, you're not going to buy that house. >> you see things freezing up if we go over the fiscal cliff. >> we're seeing the opposite of that. we've got to continue this momentum. people are buying houses now. they know these are the lower prices. housing prices are rising. i better get going. and if we break this momentum after three years of declines, it would be a real shame. >> is that -- that's happening in spite of high unemployment numbers still. what's driving the recovery at this point in housing? >> well, because again, it's not unemployment that's the problem, it's the other 20% of the people that are working that are worried one way or another. are they worried they're going to become unemployed? or are they more confident they aren't going to become unemployed? what's happening now is they're more confident that they are not going to become unemployed so they're going to start investing
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in automobiles and housing and so on. if this fiscal cliff works, that confidence level is going to be shattered. and the restoration of it is going to be much more difficult. how many times are we going to go through this process? why would you believe if they say we're going to fix it march 31st, or june, why would anyone believe that? >> i don't know why we believe it even if you have a patch on the fiscal cliff that doesn't deal with the fiscal abyss. >> no, but if the patch is -- everyone's saying it's not going to happen and obama won't compromise and boehner won't compromise. if they do compromise, even though it's not perfect and the public says they did come together and they did make a start, then i think they'll have more confidence -- >> the only type of deal you get where both sides would agree a compromise where you basically give away everything again and both sides get to go back and say they got everything they
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wanted where you don't make serious changes to entitlements, where you don't make serious changes to revenue. seems like you continue this party that everybody's had going on where we're going to lower taxes across the board, not going to worry about this stuff and keep thinking about it at a later day. >> i say the opposite is that the republicans will get entitlement reform and democrats will get higher revenue in taxes. you get what you really want and you -- and as i said, you have to compromise. and i would say that that's what's going to happen or should happen. and if it does, even though it doesn't solve the problem permanently, people say maybe we are on a new track now. >> from my point of view, you've got 40 days, you're in the middle of a river, you're drowning, got to get to the other side before you stop long-term solutions, how do we get to the other side, dry land right now in the next 40 days when everyone is taking vacations for thanksgiving and then christmas? >> yeah, you want congress sitting there. >> i want something done in the
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next 40 days. fix a patch, certain things have to happen and then you deal with the structural issues and work on it. you're not going to solve it in 40 days. >> dick says that's a confidence booster if you see a compromise or some sort of patch. that's a compromise that would give boost to the housing market or continue the momentum there. is that the same sort of thing -- >> well, the housing market is -- the housing market is on its clear path. but the motion of the consumer balance sheet and improving. and you've got to solve this issue with regard to confidence and keep the momentum in the economy going. because we are the oasis left in the world at this point in time until the chinese kick in. because europe's not solving the problem. >> publicity you guys are giving to this issue is terrific. and that will be helpful in getting -- >> do you think republicans will let marginal rates rise if they had a promise that simpson/bowles would eventually be enacted and all rates would again fall? i don't think republicans will
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let -- and i also don't think that the president will give you a guarantee that marginal rates will fall to the simpson/bowles 28%. >> well, the point is, you don't have to promise. why not just do it if you believe that? i would call the bluff. why are we talking about -- >> i'm strapped in my toboggin. >> i don't think they will believe them. you can do it today. >> coming up -- thank you. >> happy thanksgiving. >> weekly jobless claims because we're not here tomorrow. with the spark miles card from capital one,
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welcome back to "squawk box." we have some thursday data out on wednesday. initial jobless claims, 410,000. now, that's pretty amazing because that's pretty much what everybody was looking for, and that's coming off of an upwardly revised 439,000 that became 451,000. so we're down 41,000 from that revised number. and the revised number is a year and a half high basically from the spring of 2011. continuing claims, 3.337. so we'll call it a whisker shy of 3.334. no great shakes there. couple of things jump out at me. dow futures, basically unchanged. the volume numbers on the electronic platform are pretty quiet. we see a 167 on a ten-year,
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which is basically a two-week high on the yields. and we still have university of michigan final november number coming out. and that's very important because the preliminary read was the best in five years. noteworthy. the dollar is just screaming again against the yen. i mean, it is an unbelievable move over the last three or four weeks. and just to give you an idea, the nikkei would be up about 9%, 10% unless you were holding it in yen in the u.s. in which case it would only be up about 1%. so you can see how the currency of choice that you hold in investments overseas can make a whopper of a difference in your return. back to you. >> all right. great. the teleprompter now, this is all we need to say. and that's -- and i hope we have applause ready. steve liesman is onset right now. steve liesman is onset. >> thank you. thank you. and --
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>> why did -- >> i don't know why it says that. >> that's all it says. >> am i responsible for what's in the prompter? don't turn to me. >> that's all you need to tell viewers. >> that's all you need to tell viewers, it's click, turn and they go to the "today" show or wherever they go. and i have a variety of things for you. >> you do. >> maybe i didn't tell them what i was going to have. >> there we go. that's very nice. >> first of all, it's interesting, we're going to watch consumer sentiments to see if this fiscal cliff stuff is finally going to be felt by the consumer. i'll talk about the consumer in a second. >> you don't think it is? >> i don't know. it's strange we've had this surge in consumer sentiment while all we do and everybody else does is talk about the cliff. first i want to look at sandy and katrina. because we were lucky, i made this chart before we went on. and turns out the estimate was exactly right. if you have that graphic, i don't know if you have that graphic. let's see if you have that graphic. i'm holding here for five, four, maybe not. what it shows is that there it is, that's katrina in the blue,
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and that's sandy in the green. you can see the pop there and it's come down. so another week of elevated jobless claims would be normal here. continuing claims too early, that's a week behind to show up here. so we're right in the range of where you would expect to be if sandy was an event along the lines of katrina. next thing is this sentiment number. you had courtney on talking about holiday christmas sales. i want to do a pre-christmas consumer check-up on their finances. i don't know if you remember. maybe you don't, unemployment a year ago, what was the number? >> a year ago we were -- >> like a point higher. >> 9%, .1%. most of the metrics you might care about appear to have moved in the right direction for the consumer going into this holiday season. i don't know they're going to spend. i don't know how cheery they're going to feel. but when you compare this year versus last year, unemployment is down and, guys, i don't know if you have that chart i had in the back there, but unemployment
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is down. wage and salary gains year-over-year are higher this year. debt levels are down. and home prices are up. so when i check those four particular metrics -- >> take home pay has improved because it's 2% less. >> well, no, that's going to go the other way in january. right now that is right. so i don't know, mario, are you optimistic about what happens this christmas? >> i can't tell the next element. >> which is -- >> the discounts i'm going to get on merchandise at the retailer level and how do i feel when -- traffic is going to do quite well. and i can't see anything but good news at christmas. >> is there -- are there stocks you were thinking of that might be ones that are -- >> no. >> none. >> has the market priced in this surge we had -- we had good retail sales and we had -- we have decent consumer sentiment. is the market there or back because of fiscal cliff? >> different issue. investors that we deal with, private wealth management, smaller investors, couple of
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million dollars of investable funds, they are very, very concerned because what happened in september of '08 and what happened in july and august of 2011, and they are pulling out of the market. and they're -- >> if you listened to bernanke yesterday, by the way, two things he pointed out. don't just solve the fiscal cliff problem, don't do another debt ceiling dance we did a year ago. >> february 1st, january 31st, that's the next element. >> and he was saying, which he has said before, i don't know maybe why people got excited about this. but he said before the fed can't offset the effects of the fiscal cliff. >> and all the guys that come in and, you know, all of his minions. >> say the same thing. >> say that all the time. the french. dude. no aaa, the french lost the aaa. >> you had a company called hostess where there was a confrontation of philosophies and look what happened. not all the jobs will be lost because others will pick up the
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demand. somebody has to make bread and somebody has to eat it. >> they won't necessarily be with the same -- >> teammates. >> won't be the same people -- >> same employees. >> that's the sad part. and just take that element and go to congress. >> what? >> and say, okay, we're going to -- what's going to happen? and you're dealing in issues that really make individuals nervous. >> rick, are you still there? >> of course i am. >> do you think we could -- is it possible we're all wrong and the cliff could be like y2k and we could wake up and the sun came up? >> i think it is possible. i think it is possible because i think, you know, there's a lot of aspects to the cliff. there's certain aspects i personally think should be left alone to expire like payroll tax hikes, social security has enough problems without taking out their hand to mouth funding. but, you know, issues with the military and jobs. i'm not saying don't cut the military, there's a lot of fat
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there, but the way it's happening, of course, is the lazy factor that we didn't settle it up last year. so, yes, i do think it's possible. and i also think today's university of michigan sentiment survey is going to give us a very important read. because if the public is grabbing on to this or not, you know, that'll give you another is this more of a media kind of an insider, you know, kind of political issue, or is it an issue that's really affecting the middle class. and on some level, it really is going to give us an insight into how great our government is. you said it earlier, the reality is the pursestrings are still held by the same people they were held at in the two year ago midterm elections. >> yeah. >> and you know, we have a debt ceiling issue that's going to figure in prominently, you know, our treasury secretary basically thinks that, you know, down here they call them to infinity and
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beyond because they think that's what he wants. they think we ought to have a christmas toy or "toy story 4" that has our treasury secretary as the prominent star. >> right. because people down there think the united states government should default on the obligations, is that the thinking? >> no, what i think they should do is they shouldn't give a teenager a checkbook that never has to be balanced. that's what. >> who's the teenager here? >> the government. >> and which part of the government, rick? what do you want -- >> i don't know, steve. how about the part that generated $16 trillion in debt. whether it's this administration, the previous administration, there's a lot of guilty administrations. but i'll tell you what, we're not going to have more than two or three more administrations if we don't deal with it. >> i agree. i agree. but i'm just not sure right now is the time to make it happen. >> okay. >> hey, you're right on part of that. you know, after the 1934 election, if i do recall, the knuckle heads then raised taxes and we --
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>> it was 37, i think, yeah. >> no, i wasn't there, but i read the definitive book, "the forgotten man," a new history of depression, not what we hear on the other side that always talks about like ben, we have to do what we failed to do last time. it's a completely different scenario this time. >> gentlemen, we wish you both a happy thanksgiving. rick and steve, really, happy thanksgiving. break some bread. >> good to be on a program with you. >> you didn't see me do that that time? >> do you think you did that? >> which one? >> i addressed rick with the question with you sitting here. definitely behind the scenes there. >> you go and get a check -- >> i'm like kevin clash. >> i don't think referring to yourself as kevin clash -- is a good idea. >> he is replaceable. don't worry, elmo will live on. you're so worried about that. >> no. >> the other piece of it's more disturbing. hostess brands will proceed
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with a plan to go out of business. the maker of twinkies says last-minute talks broke down yesterday. hearing with a bankruptcy judge is set for this morning. kayla tausche is there. kayla? >> reporter: good morning to you, andrew, we are outside the bankruptcy court at 11:00 this morning hostess will put forth a plan to shut down and the judge is likely to approve that after the emergency talks between hostess and the dissident union of bakers fell apart. the chief of the bakers union was not present and has not returned hostess' calls for months. not really a surprise those talks fell apart. here's what the plan will look like today. hostess will put forth a plan to cut the staff to 3,200 people. they'll also put forth equity incentives for managers to stay on and help with the wind down. that's likely to be a point of contention because the judge already on monday said that was probably too sweet of a deal considering how many jobs are being lost.
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now, the ceo greg rayburn has said previously that hostess is currently spending about $1 million a day to affect the shutdown. even though it's closing, it's really no cheap matter here. they had to shut three plants because of the protest of the bakers union. they shut 33 more plants, that's 36 altogether. hostess employed 18,500 people. and while some of those jobs could be spared, it's expected after the plan to liquidate is approved today, the buyers could come out of the woodwork, but this is not for hostess the company, for specific brands, many of these companies only wanted to deal with hostess if they were unencumbered by unions, which is what is expected to happen today. coming up on "squawk box," the spirit of the season, the booming business of online wine sales. it's going to get fun on the set here. and then later today, a washington tradition at 1:00 eastern time, president obama's going to pardon the national thanksgiving turkey during a ceremony in the white house rose
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garden. well, the folks at the butter ball hot line are busy fielding questions today. what a segue, right? and we talked to one expert earlier in the show as americans get ready for tomorrow. the phone lines there are lighting up. ♪ [ engine revs ] ♪ ♪ [ male announcer ] the mercedes-benz winter event is back, with the perfect vehicle that's just right for you, no matter which list you're on. [ santa ] ho, ho, ho, ho! [ male announcer ] lease a 2013 c250 for $349 a month at your local mercedes-benz dealer.
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welcome back to "squawk box." this is pretty cool. a college sports record was shattered.
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grinnell college player jack taylor scored 138 points in one game. he broke the ncaa scoring record in division three. it was a 179-104 victory over faith baptist bible last night. he made 27 of 71 three-point attempts. but membership point was, he took 71 three-point shots. he was outside that line 71 times throwing it up. i mean, watching that game, it must have been -- anyway, he was under 50%. 52 of 108 overall, 7 out of 10 free throws. but this, i guess this guy's offense is like almost like hockey. they run down and shoot it and while they're running substitutes come in and start running while the other guys run out, and he's got this fastbreak offense, must be fun to watch. >> you noticing this -- not to get away from sports --
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>> this is -- >> oh, wow. >> so he is saying we were not involved during the due diligence process. when hp was buying autonomy. it was the lawyer for autonomy that hp says it relied upon during the process. >> you hate sports, basically. >> i love basketball and i do love that. >> still counting numbers, though. whether it's audited numbers or unaudited. >> deloit was not involved in that 138-point -- >> basketball game. >> maybe that 138-point might have been 139 for all we know. >> may have been fraud. "squawk box" is getting into the spirit of the holidays this morning with rich bergson. i'm glad you're with us, rich. is turkey white meat? you know what, rich? there's dark meat turkey. i'm totally confused. what are you supposed to drink? what kind of wine? >> well, any kind of wine is fine with thanksgiving you usually start out with a little
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bubbly and little white wine as you get into the meal and red like some pinot nior. >> maybe a dessert wine too. >> that, as well. all of those available at wine.com for you. >> and most people, unlike me, they look at the year the wine was made not the alcohol content. is that fair to say? >> yeah. i think, you know, both are sometimes important to folks, but that's one of the many facts you can learn about the wine on wine.com. but i think the year right now, the current vintages are the '08s, '09s, so forth. >> a lot of people besides joe look at the alcohol content as a selling point. >> i think mad dog, you can do that. you know, if you do aspire to being a wino. >> we call those date wines at wine.com. >> yeah. date wine. >> how have sales been with the fiscal cliff and versus a couple years ago during the financial crisis? >> yeah, they've been strong.
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we haven't seen any issues so far. just so far in november we're up about 20%, 30% across the board in the different segments of business we're in. >> would you call it inelastic. it really is, isn't it? people are going to drink wine. maybe not, at restaurants -- >> at restaurants they complain people don't order the expensive bottles. might trade down a little in weak economic times. >> what was your average price per bottle? your average ticket? >> we're doing about $28, $29 a bottle. in '08, we saw some softening, but people were spending less per bottle, but they were buying more bottles. >> and per order? versus a year ago? >> per order about $160 up from about $150 a year ago. >> terrific. do you sell distilled spirits, booze. >> just wine. >> thank you. >> you can't use the mail, right? >> we use u.p.s., fedex, and shipping wine's difficult because of the regulatory environment, so we have a
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network of warehouses around the country that enables us to navigate those -- >> would you use the u.s. postal service if they were allowed to ship for you? >> sure we would. yeah, they don't do wine. >> is there a problem with new jersey trying to get wine. they were worried about sending it to new jersey. >> different state. >> i can't send wine in new jersey from outside new jersey, so we have a warehouse local to new jersey. >> why can't you do that? >> it's state laws that are constrained shipping wine across borders. >> it comes back to boardwalk empire. >> probably does. >> prohibition and a lot of laws that have been on the books for years and years. >> have you hired anyone recently? >> yes. >> are you expanding? >> yes. in general, wine.com's growing 20% or so a year. but this time of year, we triple our workforce for december because the warehouses and the call centers get very busy for all the gifts that goes on. >> more seasonal workers than
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last year, rich? >> more seasonal workers than last year, yep. probably 10%, 15% more than10%, year. >> i'm not sure what you meant. i'm afraid to talk about it because i don't know if you want a cheap wine or powerful wine. i'm not sure what you're saying there, rich. cheap, powerful wine, both. when you said $28 a bottle, i'm thinking, whoa, whoa, what kind of a date are you talking about? rich, we appreciate it. happy thanksgiving. thanks for playing along. coming up, a perfect gift for any investor's stock picks from mario gabelli, that's next. we're off thanksgiving but join us friday morning. we're officially opening the holiday shopping season with macy's ceo. having you ship my gifts couldn't be easier.
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well, having a ton of locations doesn't hurt. and my daughter loves the santa. oh, ah sir. that is a customer. let's not tell mom. [ male announcer ] break from the holiday stress. fedex office.
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coming up before we hit the road for thanksgiving, the last word from mario gabelli, some more stocks. friday on "squawk box,"
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while others are sleeping off the turkey, we're going shopping for the real story on the american consumer. with with famed retail analyst dana telsey, the ceo of macy's, top executives of two of the nation's biggest malls and hd property brothers friday on "squawk box" at 6 a.m. eastern. [ male announcer ] you are a business pro.
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welcome back. let's get back to our guest host, mario gabelli. you have close to ten stocks? >> taxes are coming down and it will help domestic small cap stocks. secondly, companies will want to grow, so what will they buy? pep boys, stock is $10, superior industry that sells aluminum wheels. >> sup? >> a smart balance because gluten-free -- >> that was smart balance. >> smart ball, smbl. in addition to that friisher broadcasting, i paid $10, the stock is $25. i think they're worth $40? >> what's the name? >> fisher broadcasting in
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seattle. hill sh hillshire -- >> you're repeating. >> different audience, darling. you keep interrupting me. >> you must own a lot because you've mentioned that twice. >> no, i own sara lee and i've owned it for four years. >> bonda -- >> no, small caps. a couple of companies in the health care area. endo pharma, a company -- >> endo pharma? >> e-n-d-o? >> booze companies, larger which will be taken over. beam, which was a spinoff from fortune brands, home and hardware. i brought you a bottle. home and hardware, there you have a long, long traction with regards to housing. anyone that sells to housing will do extraordinarily well. >> i said you and your stocks -- >> gff -- >> you and your stocks have a lot in common. you're both extraordinarily cheap.
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>> they make doors for garages, joe. >> which one? >> you aren't listening? >> i know. >> gff, griffin. they did a lousy acquisition -- >> gff. >> gff, garage doors. >> i got it. >> are they going to get -- are they going to get hope from sandy? i mean -- >> no. it's too small. remodeling is important -- >> who taking them out? >> no, i think they'll split into pieces. financial engineering is a way to make money as well. splitting a company into pieces. trader out of richmond, virginia, stock is -- >> you like treader. >> tg is the symbol. a basket of stocks you can look at. there are so many that are yummies. >> yummies? >> buying in minority position. on larger companies, companies that basically would fit into the basket, the